An improving economy will bring sighs of relief to many employers. Unfortunately, it could also bring increased employee turnover. A strong benefits program can help you retain your valuable employees.
What factors do employees cite when they talk about leaving their jobs? Leigh Branham, an employee retention consultant, wrote in Workforce Management that only 12 percent of people exit-surveyed by the Saratoga Institute cited pay as the reason they left their employer. Of the seven “hidden” factors of why employees left, most had to do with poor job fit, poor management (i.e., lack of feedback and feeling disrespected) and lack of opportunity. Ranking Number Six after these was: “Stress or burnout issues arising from work-life imbalance, inflexibility and excess of work hours and schedules, understaffing, poor health benefits, substance abuse and work-family complications.”
Using Voluntary Benefits to Combat Employee Dissatisfaction
A good benefits program can help employers reduce employee stress caused by work/life imbalance. And voluntary benefits can help employers soften the blow of changes in health benefits due to cost-cutting.
MetLife, in its annual Study of Employee Benefits Trends, found a “correlation between the number of benefits offered and the likelihood employees will stay with their company.” The 2015 study found that the magic number was 11: with 11 or more benefits offered, employees were more loyal, more likely to recommend the company as a great place to work and expressed a higher intent to stay. On the other hand, when an employer offered fewer than five benefits, employees were less loyal, less likely to recommend the company as a great place to work, and expressed a lower intent to stay.
The MetLife survey also found a correlation between benefits satisfaction and job satisfaction. Employees who are very satisfied with their benefits are almost four times more likely to be very satisfied with their jobs.
As the “big three benefits”—medical, dental and life insurance—become standard, employers that offer more can stand out from their competitors. Voluntary benefits allow employers to expand their benefit portfolio at no cost. Interestingly, employees want these benefits even if they have to pay for them. However, as the chart in this article illustrates, small employers are not meeting their employees’ benefit needs.
Employee Access to Benefits, by Employer Size
1-99 Employees 100-499 Employees 500+ Employees
Medical 59% 93% 98%
Dental 31% 55% 73%
Life 40% 70% 86%
STD * 29% 46% 62%
LTD** 22% 38% 61%
Source: U.S. Bureau of Labor Statistics. National Compensation Survey, March 2014.
*Short-term disability: Defined as plans that provide benefits for non-work-related illnesses or accidents on a per-disability basis, typically for a 6-month to 12-month period.
**Long-term disability: Defined as plans with waiting period of 3 to 6 months, or until sick leave or STD benefits end. LTD benefits generally continue until retirement or a specified age.
In addition to the core benefits listed in the accompanying chart, voluntary benefits include programs designed to fill the gaps in employer health plans. These include:
- Accident, or accidental death and dismemberment (AD&D) policies, which pay benefits when an insured suffers a covered injury accident
- Cancer and critical illness policies, which pay benefits when an insured receives a diagnosis of cancer or other critical illness listed in the policy
- Hospital confinement indemnity plans, which pay a specified per diem amount when an insured is admitted to a hospital
- Intensive care plans, which pay a benefit for each day an insured is confined to intensive care.
Most supplemental health plans have no deductible, and many are compatible with health savings accounts. Offering these benefits can increase employee acceptance of high-deductible health plans and boost employee satisfaction with their benefits…at no cost to the employer.